Editorial: Restore fairness and transparency to the cattle market
Editorial Staff, Omaha World-Herald (NE)
Oct 3, 2021
Agriculture towers as an economic engine in Nebraska, and cattle production accounts for the largest share of the stateís ag value. Nebraska is home to more than 20,000 breeding and feeding operations, most family-owned. The health of many communities across the state depends in considerable measure on the health of the cattle sector.
Of late, that sector has faced hard times. The share of the retail beef dollar going to producers has shrunk significantly. World-Herald reporting by Henry Cordes and Paul Hammel has been examining the details. In 2014, producersí average portion of the retail beef price was a 55% share. Now, that share has fallen to 37%. Meanwhile, the packersí share has gone from less than 1% in 2014 to 22% now.
Yes, one of the enduring fundamentals of agriculture is its cyclical nature. Itís true, also, that some short-term events have caused major disruptions: a 2019 fire that shut down a major Kansas packing plant; COVID-related shutdowns in 2020; a ransomware attack this year against mega-packer JBS.
But none of that erases the fact that the cattle market isnít operating fairly, and that is the central problem to be addressed. Itís in the interest not only of cattle producers but of the general public itself that the market operate fairly, transparently and efficiently. Otherwise the market can be subject to distortion and possible manipulation, harming producers and consumers alike.
That problem is seen already in regard to chicken processing: The Big Four packers have paid hundreds of millions in fines and civil penalties after allegedly conspiring to fix prices in that sector. Such collusive behavior in beef packing hasnít been demonstrated at this point, though the federal Justice Department is investigating as part of broader antitrust action by the Biden administration.
The key concern for cattle producers is a lack of a transparency in pricing:
more, including chart